Despite huge success in Oklahoma’s STACK play, Texas-based Newfield Exploration Co. reported a second quarter loss of $667 million. And a day after the report of losses, the company announced the sale of all of its assets in Texas so it can speed up drilling in Kingfisher, Blaine and Canadian counties in northwest Oklahoma..
The quarterly figures translated into a loss of $3.36 per share while earnings, adjusted for asset impairment costs and non-recurring costs came to 32-cents a share.
Revenue totaled $381 million for the period which was short of Wall Street expectations and forecasts. Several analysts surveyed by Zacks Investment Research expected earnings to be nearly $404 million.
But on Wednesday, the company said it had signed two separate purchase and sale deals divesting substantially all of its Texas assets for combined net after tax proceeds of nearly $390 million. The deals are expected to close in the third quarter.
The transactions include Newfield’s unconventional assets in the Eagle Ford Shale and its conventional natural gas assets in south and west Texas. The company said its current net daily production from the combined assets is nearly 12,700 BOEPD of which 35% is oil. The deal to sell the Eagle Ford package was signed with Protégé LLC. The purchaser for the conventional natural gas assets in South Texas was not revealed.
“We continue to refine our portfolio and focus our people and capital resources on assets with high returns and a deep inventory of future drilling opportunities,” said Newfield Chairman and CEO Lee K. Boothby. “Since 2009, we have generated about $3 billion in proceeds from asset sales including today’s announcement as we transitioned to an oil company with a premium asset portfolio in onshore resource plays.”
He said the proceeds from the sale of the company’s Texas assets will replenish its cash balance and “position us for the time acceleration of our STACK development in the future.”